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The fed's 2026 stress test is for a 58% equity crash in 2026, and a 10 percent unemployment rate in the third quarter of 2027 (www.federalreserve.gov)
submitted 6 months ago by to c/aboringdystopia@lemmy.world
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https://www.federalreserve.gov/publications/2026-stress-test-scenarios.htm#%3A%7E%3Atext=Equity+prices+fall+about+58%2Clevel+of+5.7+percentage+points

This is why banks are tightening credit. https://www.cnbc.com/2026/05/02/us-iran-war-credit-score-loans-mortgage-rates.html

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[–] 41 points 6 months ago (8 children)

Sweet, after sitting in the passenger seat for the 2008 meltdown as a teenager, let's see how it feels to steer through the next one myself 🫡

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  • [–] 17 points 6 months ago (4 children)

    2008-12 financially was some of the best years for my wife and I. In 2007 we were both working full time and barely able to cover our rent and expenses when it started.

    Housing prices crashed and my wife and I were able to buy our first place with payments less than our rent in 2009. Because of tax credit programs, I had my entire down payment refunded.

    Car prices and interests rates fell so we were able to replace our vehicles with ones that were 30% cheaper than a few years before the same year.

    My wife got laid off in 2010 but she had unemployment for 2 full years. She was able to stay home with our kids while she looked for work.

    Because she was laid off, I kept applying to higher paying jobs. I ended up landing a new job and increased my pay by 90%. She stayed home with the kids for the next 8 years and got her master's degree after the unemployment ran out. She was then able to work from home for the next 7 years.

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  • [–] 5 points 6 months ago (3 children)

    What was it like getting a loan in the middle of the crash? Housing prices were cheap but I heard lending was very tight

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  • [–] 7 points 6 months ago (2 children)

    It wasn't really that bad as long as you were reasonable on your debt to income ratio. It absolutely stupid easy to get a loan in the boom before the bust. The contrast is why people remember it being "tight". We had no issues with getting a loan.

    I did know some people who were all pissed off that they couldn't get a home loan but they had $120K in debt between car, furniture, and student loans. They had to have their parents help them out with rent every other month.

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  • [–] 6 points 6 months ago (1 child)

    Your story still confirms the age old adage: economic crashes are wealth consolidation mechanisms for the 1%. You happen to have lucked yourself in with them just this once, good for you.

    For each story like yours there are hundreds of thousands who lost their lives savings sometimes even their retirement funds and had to keep working till they died.

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  • [–] 9 points 6 months ago

    This was implied but not spelled out.

    Critically important part of the story: if it wasn't for key government assistance at the right time, the story is would be very different.

    First time home buyer - a government program that allowed us to put 3.5% down instead of 10-20% for traditional mortgages.

    2009 - First time home buyer tax credit. It was $7,500 If I recall correctly. It was more than the 3.5% down. We were also able to claim it immediately after purchasing the house. We we received the money 3 weeks after closing. (How did we get $7,500? We cashed out every retirement plan we and had a small insurance payment from our apartment being robbed.)

    Unemployment insurance was extended from 26 weeks to 2 years. This gave me time to apply for the higher paying jobs. It took me over year to get the higher paying job. We would have likely lost the house without assistance.

    There is no effective way out of poverty without a helping hand.

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    • [–] 22 points 6 months ago

    I work in this field. It’s really about uncertainty. Banks rely on certainty to make choices about lending. When political leadership is unsteady (and corrupt) and times are uncertain, the prudent move for lenders is caution. No one wants to be caught holding the bag in the crash.

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